The problem of divorce and morality: A Literature Review

 Crispina G. Calumpit

Divine Word College of Laoag – Graduate School

Abstract

            The sanctity of marriage is irrevocable.  To break a promise made in the eyes of God is a very crucial decision, every married individual should take into account.  However, there are many factors to consider before finally ending up a marriage and engaging into divorce without disregarding morality and ethics.

            This paper presents how marriage is defined, as stated in the family code, and in view of Catholicism.  It explores the differences between divorce, annulment, and legal separation, reasons for annulment, nullity of marriage, and legal separation in the Philippine setting.  It also includes the pros and cons of divorce and the analysis of Divorce Bill in the Philippines.

            This also highlights the morality of getting divorced, and the ethics of divorce which are incredibly important and helpful in establishing a paradigm of influencing people’s decision-making processes, most especially to those who are having issues on matter of divorce, including those who are capable of giving advice to individuals undergoing such struggle.

            In a way, the comprehensive literature review gives a clearer picture about all the concepts included in consideration to all the issues concerning them.  This will serve as an avenue to come up with a thorough decision, either to indulge in divorce or to continue and try to preserve healthier and stronger marriages.

Keywords

morality, ethics, marriage, annulment, legal separation, divorce, family code, illegitimate promises, bilateral divorce, unilateral, deontology, utilitarianism

Introduction

            Everybody wants to be morally upright because everybody desires to live in a society where one feels a sense of belonging and accepted.  To be so,  there are standards of behavior that would be accepted by all human beings with specific idealized situations.  This set of moral principles must be adopted by all rational agents.

            Marriage, is a legally and socially recognized union,  between a man and a woman, that is regulated by laws, rules, customs, beliefs, and attitudes that prescribe the rights and duties of the partners and accords status to their offspring (if any). It is rooted in cultural, religious, or personal beliefs which often involves a formal ceremony and legal documentation.

            It is a sad fact, however, that not all marriages prosper as expected.  Matrimony fails for a variety of reasons that couples never anticipated.  Physical, mental, and emotional abuse, poor communication, financial problems, infidelity, lack of intimacy, commitment, external pressures and more.  When these factors attack the sacred vow, mutual respect breakdown, resulting to the separation of husbands and wives.

Divorce has become rampant, canceling or reorganizing the legal duties and responsibilities of marriage, thus, dissolving the bonds of matrimony between a married couple under the rule of law of country or state. 

A survey nationwide in association with TIME which was complemented by an analysis of demographic and economic data from the United States Bureau was done.  According to a new Pew Research Center, over the past 50 years, the transformation trends have led to a sharp decline in marriage and a rise of new family forms have been shaped by attitudes and behaviors that differ by class, age, and race.

Over the years, several bills have been introduced in the Philippine Congress aiming to legalize divorce, citing considerations such as irreparable marital breakdown, spousal abuse, and incompatibility. These legislative attempts have sparked significant debate, balancing societal values, religious beliefs, and the rights of individuals seeking to dissolve irreparable marriages. (Respicio & co., 2024) 

Abalos 2017, Divorce and Separation in the Philippines: Trends and Correlates mentioned that the Philippines is the only country in the world, aside from the Vatican, where divorce is outlawed. Yet, despite the lack of divorce law in the country and the high costs of obtaining an annulment, recent data shows that a growing number of Filipinos dissolve their marital unions, either legally or informally.

On the other hand, due to domination of the Catholic Church, pro-divorce activists conclude that even in cases of spousal abuse marriages are extremely hard to escape.

Are individuals engaged in divorce moral?  Do they necessarily violate ethical principles? The judgment underlies on the perspective of people making the judgment whether individuals engaged in divorce are considered moral or ethical. 

This paper seeks to emphasize the morality and ethics of divorce.  Through the readings of related literature, it seeks to give understanding on the different concepts underlying divorce, its morality and ethics. 

Literature review

Marriage

The Family Code of the Philippines, Article 1 states that marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for the establishment of conjugal and family life. It is the foundation of the family and an inviolable social institution whose nature, consequences, and incidents are governed by law and not subject to stipulation, except that marriage settlements may fix the property relations during the marriage within the limits provided by this Code. (52a)

It is the main legal function of marriage to ensure the rights of the partners with respect to each other and to ensure the rights and define the relationships of children within a community. With marriage as a historically has conferred a legitimate status on the offspring, which entitled him or her to the various privileges set down by the traditions of that community, including the right of inheritance. Marriage also established the permissible social relations allowed to the offspring, including the acceptable selection of future spouses in most societies. (Encyclopedia, 2024)

In Catholicism marriage is a sacrament that both baptized man and woman administer to each other through their marriage vows and lifelong partnership. Given that to a Catholic sacramental marriage reflects the union of Christ with the church as his mystical body, Marriage is understood to be an indissoluble union because a Catholic sacramental marriage reflects the union of Christ with the church as his mystical body. The marriage union is used to sanctify both the husband and wife by drawing them into a deeper understanding of God’s love and is intended to be fruitful, with any children to be raised within the teachings of the church.   The rite commonly takes place during a mass, with a priest serving as the minister of the mass and as a witness to the mutual consent of the couple. (Petruzzello, 2018)

Understanding Divorce in the Philippines

Divorce is a legal process that terminates a valid marriage between two individuals, allowing them to legally remarry. The Philippines, known for its conservative Catholic values, is the only country besides the Vatican where divorce remains generally prohibited. However, there are exceptions and legal alternatives available for Filipinos, such as annulment and legal separation.

Divorce happens when a married couple decides to end their marriage. By definition, divorce means termination of a marriage. During this process, both parties have a lawyer to represent them to arrange issues such as property division and child custody. The Philippines and the Vatican are the only two sovereign states without a div

In the Philippines, although most couples separate after a relationship, they’re still married on paper. On the other hand, some take it through legal means and try to have their marriage nullified. The only available options for married couples are legal separation and annulment, while debates for divorce is ongoing. 

Divorce in the Philippines: Legal Framework and Processes

In an article, Divorce in the Philippines: Legal Framework and Processes, Respicio mentioned that divorce remains a contentious and complex issue in the Philippines, a Catholic country deeply rooted with values that historically has absolutely never agreed for the dissolution of marriage through divorce. The legal framework surrounding marital dissolution is multifaceted, including provisions for annulment and legal separation under specific circumstances, yet largely disregarding divorce as it is popularly known globally.

Psychological Incapacity: A Ground for Annulment

One of the most debated provisions for annulment is psychological incapacity, defined under Article 36 of the Family Code. This ground has been subject to extensive interpretation by the Philippine Supreme Court, which emphasizes that psychological incapacity must be characterized by gravity, juridical antecedence, and in-curability. Cases under this provision require thorough psychological evaluation and expert testimony, making it a complex and often expensive process. (Respicio & co., 2024)

What is the nullity of marriage in the Philippines?

Annulment declares a marriage null and void from its inception, as if it never happened. Psychological incapacity, fraud, and consent obtained under duress are the considerations on this ground.

The declaration of nullity of marriage applies to null and void marriages from the beginning. These marriages are nullified because one of the essential requisites of marriage is absent. 

According to the Family Code, marriages in the Philippines can be nullified if: 1) the spouse has a psychological incapacity for marriage; 2) the marriage is incestuous; 3) marriage is against public policy; 4) The marriage is bigamous; 5) when one of the spouses remarry without complying with the precordial requirement of the judgment of annulment or absolute nullity of the previous marriage.

What is Annulment in the Philippines?

The nullity of marriage and annulment might look like similar terms, but there are differences between the two. The difference is that you annul a marriage is considered valid under the law. In the nullity of marriage, the union is void because the marriage was invalid from the start. Annulment has different grounds as well. 

According to Article 45 of the Family Code, here are the grounds for annulment: 1) no parental consent if either party was between 18 and 21 years at the time of marriage; 2) psychological incapacity; 3) fraudulent consent includes non-disclosure of either party of a material fact before marriage, such as pregnancy by another man or a sexually transmitted disease; 4) consent obtained by force, intimidation, or undue influence; 5) physical inability to consummate the marriage; 6) serious or incurable sexually transmitted disease.

Legal Separation: Grounds and Consequences

Legal separation, allows couples to live apart and divide their assets. The marriage bond is not dissolved, meaning neither party can remarry. While legal separation permits spouses to live apart and divides property and custody of children, it does not allow either spouse to remarry, as the marriage remains legally binding.

Legal separation is a court-approved decision of the court that allows the separation of husband and wife. Under legal separation, the marital obligations between the two parties are ended, but the marriage is not. In a legal separation, the property regime is separated and severs matrimonial obligations. 

During a legal separation, properties are liquidated and dissolved. Usually, the spouse at fault has no right to any net profits earned by their joint property. 

Here are the grounds for legal separation in the Philippines: 1) repeated physical violence or abusive behavior towards the petitioner or their children; 2) physical violence or moral pressure to make the petitioner change the religious or political separation; 3) if the spouse attempts to induce their children to engage in prostitution; 4) if the spouse will be incarcerated for more than six years, even if pardoned; 5) drug addiction or alcoholism of the spouse; 6) lesbianism or homosexuality of the spouse; 7) contracting by the respondent of a subsequent bigamous marriage, whether in or outside the Philippines; 8) sexual infidelity or perversion of the respondent; 9) attempt on the life of petitioner by the respondent; or 10) abandonment of petitioner by respondent without justifiable cause for more than one year.

Pros and Cons of Divorce

Parents and children involved are affected positively and negatively to the outcomes of divorce.  Among the pros are greater freedom, room for growth, and an improved environment for children.  However, stress and financial challenges can complicate outcomes for the family.

According to Buscho, divorce is a complicated and emotional process that can have both positive and negative consequences. Some outcomes are positive for some people but affect others negatively.  She cited the following pros and cons of divorce.

The generally considered pros of divorce are:

Freedom and Independence. Divorce can provide individuals to make their own choices and live life on their terms. with the freedom and independence.  On the contrary, there will be an extreme emotions created with this newfound independence  if they are accustomed to a long-term partnership.

Escape From Unhealthy Relationships. It can lead to improved mental and physical health because divorce can provide an escape from abusive or toxic relationships.  On the other hand, most people experience emotionally challenging situations such as sadness, anger, guilt, and anxiety during the divorce process, however, these emotions usually subside as you adjust to your new life.

Opportunity for Personal Growth.To some people, divorce to a stronger sense of self and increased self-esteem and take it as an opportunity for personal growth and self-discovery but to others, there is fear and emotional toll of divorce can hinder personal growth.

Improved Financial Situation.  Divorce can lead to improved financial stability and the ability to make independent financial decisions Depending on the circumstances, On the other hand, divorce can also result in financial hardships due to the support of two homes with the same income. Disputes over assets, child support, or alimony are also inevitable.

Better Environment for Children.  Divorce may provide comfort, a safer and more stable environment for the children especially, in cases of high conflict or abusive marriages.  To others, emotional turmoil, trauma, and adjustment issues during and after a divorce are experienced by children as they adjust to new family structure.

The cons of divorce are:

Emotional and Psychological Stress.  Stress, depression, anxiety, and other mental health issues due to the fact that divorce is almost always emotionally and psychologically taxing.

Financial Challenges.  While some experience improved financial situations, others may face significant financial challenges, including legal fees, dividing assets, and maintaining separate households.

The betterment for children’s well-being is considered as divorce can create a more stable and peaceful home environment in some cases.

Social Stigma.  Divorce may free individuals from a marriage that wasn’t socially or culturally accepted. Expect judgment and isolation, however, it is worthy to note that it is the marriage that failed not the persons involved in it.

Analysis of Divorce in the Philippines

Ethical and Moral considerations

            Individual autonomy pertains to human rights determination to self determination and choice.  Marriage as sacred and personal should allow couple to part ways when the union could no longer be fixed.

            Human dignity is endangered if abuse is already disturbing.  This makes divorce ethical because it offers a way to respond to such pain and suffering and let go to look for better relationships.

Philosophical Perspectives

            Utilitarianism point of view allows divorce to be legalized to offer chances of happiness through freedom from sad reality.

            Social Contract Theory permits societies to embody the will of the people. There would also be an agreement on Legalizing divorce to be in accordance with the changed demographics and the perception of Filipino people should also be an agreement.

Political dynamics

            Religious influence vs. Secularism has been evident due to the passion of the Catholic Church taking a stand in the fight against the change of law implies that religion and culture are a fundamental challenge in accepting the outcome in a society that embraces the principle of the state and church separation.

Socio-economic Implications

            Legislative Gridlock illustrates that even bills with a high degree of urgency cannot pass through the Philippine Congress due to legislative grid and polarization.

Socio-Economic Implications:

Access to Justice:  highlights the creation of access to justice since some people cannot afford the cost of legal aid in seeking a legal separation or annulling their union. Neutralizing the legalization of divorce could therefore allows couples ending their troubled marriage easily without spending so much.

Gender Equality:  frees women from abusing or oppressive husbands and thus supports gender equality and an effective way out and a signal of financial freedom.

Global Context:

International Human Rights Standards:  Adopting such laws, in terms of individual, gender, non-discrimination and freedom from violence may help to legalize divorce and possibly draw the Philippines’ laws closer to measuring up to those set out by international standards.

Globalization and Cultural Change: indicates that social attitudes toward divorce are influenced by globalization and cultural change across the globe. Marriage and family is a crucial social institutions that all societies have to face the challenges that come along with changes, and experiences of tension between conventional and emerging norms where the Philippines is not exempted.

Morality

 “Morality” refers to norms and behavior, a code of conduct that would be accepted by anyone who meets certain intellectual and volitional conditions, almost always including the condition of being rational. To regulate their lives and live a good life. The person meets these conditions is typically expressed by saying that the person counts as a moral agent.

The morality of divorce

            According to Mc Brayer, most of the people have been significantly affected by divorce.  At this point, deciding to end a marriage is one of the most significant decisions a person ever makes.  To consider it morally permissible means that there is no moral obligation required to act differently.  This means that you can have a divorce if you have met all your moral obligations. He mentioned the following considerations:

What makes marriage morally special?

            Getting married generates special moral obligations that one would not otherwise have, as many ethicists agree. Primarily, marriage creates moral obligations because it involves promise-making.  Promise-making is a way of generating moral obligations.  Just as when wedding ceremony takes place, two people make promises to one another.  Thus, getting married generates moral obligations.

            On the other hand, some ethicists also resist this thinking.  They insist that marriage promises do not have the power to create moral obligations.  To these philosophers, marital vows are just promises to feel a certain way towards one’s partner which cannot be controlled.  It does not coincide with the thought that someone is morally obligated to do something beyond one’s control.  In this case, promising to do something beyond one’s control does not create a new moral obligation.

            There are at least two good reasons to reject this analysis.  First, it is plausible that in the marriage context, we are promising to do things that are in our control, or over which we have indirect control.  For example, when we get married, we pledge to do our best to bring about a certain emotional state, or make an unconditional commitment to another person.  Second, and more importantly, anyone who has been to a wedding can see that although there are often emotional components to marital vows, there are also behavioral components.

            Marital vows, therefore create new moral obligations.  The degree of the moral obligation generated by a promise varies with the seriousness of the promise-making, the clarity of the promises made, and the consequence of breaking the promise.  Finally, it appears that the marriage promise creates a strong and special obligation between the marriage partners.

Illegitimate promises

            It has been said that moral obligations exist because of promises in marriage.  To determine the permissibly of divorce, there is a need to determine what is violated on marriage promises.

            First, promises generate new obligations only when the person making the promise is autonomous, and informed, and does so willingly.  Otherwise, the promise is morally illegitimate, considering it not a real promise.

            Second, coercion affects the condition that the marriage promise be made willingly because there are times when a partner is coerced into marriage.

            In these two cases, the marital promises are considered illegitimate, hence no moral duties between the partners were created.  So, it is morally permissible to severe the relationship through divorce because there are no such special moral duties bonded.

Bilateral divorce

            Bilateral divorce is a divorce by mutual consent.  Making a legitimate promise creates an obligation, releasing someone from a promise eliminates obligation.  One way for divorce to be morally permissible would be for both partners to release their respective marital promises. 

            But it is worth to note that even there is mutual agreement to end the marriage between the couple, it is still wrong to do so if their promises were made before God.  Nevertheless, a promise before someone is different from a promise to someone.  A promise made before you makes you a witness, whereas a promise made to you makes you a beneficiary.  In a case, where God is not the beneficiary, you don’t have to get His permission.

            Take note of two things.  First, while bilateral divorce is morally permissible - in some ways, it is morally permissible on ll other things being equal, but not all times are equal.  Families with children are the obvious example.  Parents have moral obligations to their children, as well as to each other.  These moral obligations prevent parents from doing what is not good for their children, and in so far as divorce is not an exception, these parental obligations hinder these parents getting into divorce, while these children are still young to suffer the harmful effect.

            Second,  people are troubled due to apparently cavalier divorces.  Examples are the Hollywood stars who married on a whim and divorced 6 months later.  Their actions manifest morally permissible, but the attitude behind it reveals a moral vice, so quick to make promises that they are not sincere to keep.  People who take marital promises for granted are not morally speaking, the kind of people to be desired.  This is definitely, immoral behaviour.

Divorce when a partner cannot fulfill his/her duties

            This principle is relevant to divorce in this way:  if you become unable to do what you promised to do, then you cannot have a moral obligation to do that thing.  Hence, any time one of the partners is literally unable to keep the marital promise, divorce will be morally permissible.  However, this reason requires being clear about what marital promises are.

            Marital promises are about goals over which we have indirect control.  These are aimed at: (A) the goal of fostering loving relationships between the partners, and (B) the long-term goal of making a partner’s life better.

            Suppose that these are both plausible candidates for what we are pledging when we get married. If the goal is (B), we have the following interesting result: when staying together does not make your partner’s life better, in the long run, then your marital promises do not obligate you to stay together. For example, suppose one of the partners becomes involved in an extramarital affair, and that she and her lover are happy building their lives together. In this case, it is morally permissible for the other partner to initiate a divorce on the grounds that his promise to his partner was aimed at making her life better and he is unable to do so given the current situation. Because he cannot do so, he has no moral obligation to do so. Thus, in this sort of circumstances it may be morally permissible to formally mutually end the relationship. (McBrayer 2017)

Unilateral divorce

            When only one of the partners desires the dissolution of marriage, a unilateral divorce happens.

The obligations from marital promises make it morally wrong to seek a unilateral divorce in many cases since promises produce moral obligations. In the case of a man who wants to divorce his wife on the grounds that she has been recently diagnosed with a chronic degenerative disease, it is not a morally permissible ground for divorce. In particular, neither non-reciprocation nor the lack of happiness of one of the partners justifies unilateral divorce.

Many people who divorce cite the fact that their partners did not reciprocate in certain ways as justification for the divorce. Their partners weren’t ‘doing their part’ in the relationship. Whether this counts as a morally adequate reason to get a divorce depends on whether the marriage promises were unconditional or conditional, and the nature of the conditions. Take, for instance, the promise to be sexually faithful to one’s partner. On an unconditional reading, this promise says, ‘No matter what happens, I promise to be sexually faithful to you’. However, on a conditional reading, the promise might say, ‘I will be sexually faithful to you so long as you are sexually faithful to me’. On the unconditional reading, one has a moral reason to be sexually faithful to one’s partner regardless of what he or she has done. On the conditional reading, one has a moral reason to be sexually faithful to one’s partner if and only if he or she has also been sexually faithful.

Generally, if marital promises are conditional, then the non-reciprocation of a partner in such a way would cancel out the moral obligation generated, and hence a divorce would be morally permissible. But if marital promises are unconditional, then the non-reciprocation of a partner is morally irrelevant, and hence a divorce would be morally impermissible.

Does happiness, or the lack of it, count as a valid condition for divorce?

Regarding the (supposed) right to be happy, many people cite their ongoing unhappiness as the justification for their divorce. The idea is that if it becomes impossible for a person to be genuinely happy while married to their partner, it is morally permissible for them to divorce that partner. (McBrayer 2017)

Ethics of divorce: Deontology and utilitarianism

In the article, Ethics of Divorce: Deontology and Utilitarianism, ethics refers to standards of behaviors and is defined as the acceptable codes of behaviors and norms. 

Furthermore, if all people who are likely to be influenced by the consequences gain the greatest good, actions are ethically right. Hence, if they have the capacity to result in the greatest happiness among all people, actions are ethically justified. The natural laws that are applicable. Therefore, people may utilize the laws in making decisions that influence individual actions based on what is permissible and/or not tolerable under the doctrine.

In the context of divorce, it emphasizes the significance of evaluating divorce decisions to ensure that they do not harm parties through the consequences of the decisions made, according to Ketz.  People should be selfless and exert effort to enhance maximum good for all people who are likely to be influenced by their actions.

Divorce is inappropriate and not recommended after the solemnization of marriage based on the religious theological perspective. Therefore, the ethics of divorce can only be drawn from the reasons under which divorce may occur.  Divorce is permitted only in case challenges emerge in a marriage based on Islamic and Christian religious teachings.

The ethics of divorce is complicated and delicate under the religious theological perspective which holds that divorce is inappropriate and not recommended after the solemnization of marriage.

Ethics defines the acceptable codes of behavior and norms. The religious theological perspective of divorce holds that divorce is inappropriate and not recommended after the solemnization of marriage. Its ethics can only be analyzed based on reasons of the divorce.  Religious perspectives only permit divorce in case challenges emerge in a marriage as drawn from both Islamic and Christian teaching.

The Machiavellianism school of thought holds that compliance with ethical behavior which emanates from religious norms and values, or even traditional social values that guide the institution of marriage. Marriage was considered an important rite of passage which the society expects to last until death separated the partners. Consequently, divorce was considered unethical.

Concerning the issue of divorce, these two schools of thought argue in almost similar paradigms when evaluating the appropriate ethical decisions, yet differ in their prediction and determination of the extreme circumstances under which divorce may become the ethical thing to do. Utilitarianism requires the evaluation and analysis of its impacts in terms of costs and which delivers the utmost good result to the wider number is the best decision made.

In the context of marriage and divorce, the wider group of people may imply the society, children, and even one’s partner. The deontological perspective provides exceptions from a much-easier-to-identify personal circumstances. Thus, divorce is ethical when domestic violence or any other divorce causes that have negative emotional, physical, mental, and psychological implications for the parties to a marriage.

Conclusion

            Marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for the establishment of conjugal and family life.

            Divorce is a legal process that terminates a valid marriage between two individuals, allowing them to legally marry again.  Annulment declares a marriage null and void from its inception, as if it never happened. Legal separation, on the other hand, allows couples to live apart and divide their assets without dissolving the marriage bond, meaning neither party can remarry.

            Grounds for annulment, legal separation, and nullity of marriage are derived in the family code of the Philippines.

Truly, there are moral issues that are difficult to solve.  In the case of shattered marriages, this has been a perennial problem among couples who are not fortunate enough to let their marriage prosper.

Analysis of the Divorce Bill in the Philippines includes ethical and moral considerations, philosophical perspectives, political dynamics, socio-economic implications, and global context, all in favor of divorce under varied considerations.

Many divorces are morally permissible. These include cases in which the marriage promise was illegitimate, scenarios in which one of the partners is unable to fulfill the promises, and considered bilateral divorce. But many divorces are also morally wrong, including those in which the partners have other obligations that require them to stay together, at least for a time, and unilateral divorces in which one partner’s non-reciprocation or one’s right to be happy is cited as the sole reason for the divorce.

There are two take-away thoughts. First, a promise should be sacred which requires us to be very careful. This promise grounds special moral obligations, and yet they are all too often vague, unclear, or impossible to fulfill.  Marriage should be a well-decided stage to go through where partners entering into it should have a vision of the future in their explicit conversations of their expectations.  It should be a promise well kept and enough to bind the sanctity of the matrimony.

Second, we should also be very careful about the decision to get a divorce. Whether a divorce is morally permissible depends on a great many things, including the content of the promises made between the partners.  Merely citing a right to be happy does not dissolve the moral obligations we have in other areas of life. Nor does it on its own obviate the moral obligation we have to stick with a spouse when doing so makes us unhappy.

Considering both traditional and religious perspectives on the ethicalness of divorce, an emerging question is whether one should remain clinging on a marriage that is detrimental to one of the partners physical, mental, social, and psychological well-being and growth, should they remain? When one partner turns out abusive and adulterous, should they endure?  This paper suggests utilizing deontological and utilitarian ethical theories in arriving at an appropriate ethical decision while evaluating whether divorce is ethical in such circumstances.

Generally, the morality and ethics of divorce are subjective and will sometimes depend on the specific circumstances of the marriage, the reasons for considering divorce, the values and beliefs of the individuals involved and in consideration to the guided laws in the society.  While there are acceptable arguments on both sides of the debate, it ultimately comes down to the fundamental question of whether individuals should have the right to end a marriage that is no longer working?

REFERENCES

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Petruzzello, M. (2018, February 6). The Seven Sacraments of the Roman Catholic church. Encyclopedia Britannica.

Britannica, T. Editors of Encyclopaedia (2024, July 30). deontological ethics. Encyclopedia Britannica. https://www.britannica.com/topic/deontological-ethics

Beever, A. (2013). Kant on the Law of Marriage. Kantian Review, 18(3), 339–362. doi:10.1017/S1369415413000149

Papadaki, L. (2010). Kantian Marriage and Beyond: Why It Is Worth Thinking about Kant on Marriage. Hypatia, 25(2), 276–294. doi:10.1111/j.1527-2001.2009.01078.x

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Official Gazette.(1987, July 6,s.1987. Offical Gazette of the Republic of the Philippines. https://www.officialgazette.gov.ph/1987/07/06/executive-order-no-209-s-1987/

McBrayer, J. (2017). The morality of getting divorced. Philosophy Now. https://philosophynow.org/issues/120/The_Morality_of_Getting_Divorced

Abalos, J. (2017), July 10. The rise of divorce, separation and cohabitation in the Philippines. Niussp. https://www.niussp.org/family-and-households/the-rise-of-divorce-separation-and-cohabitation-in-the-philippines/?print=pdf

Pew Research Center. (2010, November 18).The decline of marriage and rise of new families. Pew Research Center. https://www.pewresearch.org/social-trends/2010/11/18/the-decline-of-marriage-and-rise-of-new-families

Camella.(n.d.) Divorce, annulment, and legal separation in the philiipines. Camella. https://www.camella.com.ph/divorce-annulment-and-legal-separation-in-the-philippines/

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Moral challenge of Success: Treating Employees as Resources

 MARLON D. MACALMA

Divine Word College of Laoag, Ilocos Norte, Philippines

Abstract

 

This reflection paper realizes the ethical issues of treating employees as mere resources and assets in organizations, emphasizing the significance of balancing and harmonizing business goals with respect for individual dignity. It discusses how Human Capital Theory views employees as valuable assets and the risks of seeing them only as tools for productivity. The paper draws on real-world examples like Google’s “20% Time” and IBM’s development programs to illustrate ethical practices that support employee growth. It also examines and analyzes how companies like Ayala Corporation and Jollibee Foods Corporation use ethical leadership and Corporate Social Responsibility (CSR) to ensure fair and objective treatment of employees. The paper concludes that recognizing employees as individuals, rather than just resources, leads to a healthier work environment and greater organizational success.

 

Keywords Ethics, Human Resources, Human Capital Theory, Kantian Ethics, Motivation, Corporate Social Responsibility, Ethical Leadership

 

Introduction

 

This reflection paper determines the ethical issues of treating employees as resources or assets in an organization. It focuses on finding the right balance between achieving business goals and respecting each person's dignity. Human Capital Theory views employees as valuable assets, proposing that enhancing their skills and knowledge benefits both the individuals and the organization (Becker, 1964). However, this view can sometimes lead to seeing people as just tools, which raises ethical concerns. Kantian ethics argues that people should be valued for who they are, not just for what they can do for the company (Kant, 1785). This idea is important to prevent treating employees in a way that exploits or degrades them. Motivation theories by Maslow and Herzberg emphasize the need to meet employees' higher needs for personal growth and recognition to keep them engaged and satisfied (Maslow, 1943; Herzberg, Mausner, & Snyderman, 1959). Moreover, ethical leadership and corporate social responsibility (CSR) emphasize the importance of treating employees fairly and with respect, supporting their well-being (Brown, Treviño, & Harrison, 2005; Freeman, 1984). Combining these views helps organizations balance ethical practices with achieving their goals, creating a workplace that values employees as individuals while striving for success.

 

Human Capital Theory and Ethical Considerations

 

Human Capital Theory, introduced by economist Becker (1964), suggests that investing in employees’ education and development can make them more productive, benefiting both the employees and the company. A real-world example of this is Google’s “20% Time” policy. This policy allows employees to spend 20% of their workweek on projects they are passionate about, even if they are not directly related to their job. This investment in employees' personal interests and professional growth not only encourages innovation but also respects their individual goals and well-being. It shows an ethical approach by supporting employees' development, which in turn helps the company succeed.

On the other hand, the ethical challenges arise when the focus changes from valuing employees as individuals to seeing them only as assets. For example, if a company pushes for maximum productivity and financial gain without considering employees' needs, it might treat them as mere tools to achieve business goals. This can lead to serious ethical issues. A company that demands long hours and high output without addressing job satisfaction or work-life balance might create a stressful environment where employees feel overworked and unappreciated. This approach risks exploiting workers and failing to support their overall well-being.

 

Consider a company that prioritizes high performance but cuts back on employee support programs to save costs. Employees might face stress from increased workloads, reduced job satisfaction, and limited personal development opportunities. Such a company might see a short-term improvement in productivity but could suffer from higher turnover rates, lower employee morale, and a damaged reputation in the end. This scenario highlights the importance of balancing performance goals with ethical treatment, ensuring that employees are valued and supported as individuals, not just as means to achieve business outcomes.

Balancing Performance with Ethical Treatment

Balancing performance goals with ethical treatment of employees can certainly be challenging. Human Capital Theory suggests that investing in employees—through training, development, and support—should ideally benefit both the organization and the employees. However, when this investment is solely aimed at maximizing productivity without regard for employees' well-being, it can lead to significant ethical issues.

 

For example, consider a company that prioritizes digging out the maximum output from its employees. Management might push staff to work longer hours, cut breaks, or increase workloads without considering their health or work-life balance. Although this might yield short-term productivity gains, it often results in burnout, decreased job satisfaction, and higher turnover. Such an approach disregards employees' overall well-being and raises ethical concerns.

 

In contrast, IBM exemplifies a more balanced and ethical application of Human Capital Theory. Through initiatives like the “Think Academy” and other development programs, IBM demonstrates a commitment to both employees' professional growth and personal well-being. The Think Academy offers continuous learning opportunities that help employees advance their skills and careers, reflecting IBM’s belief that supporting their development benefits both the company and ultimately the employees.

 

Moreover, IBM fosters a positive work environment by providing resources for mental and physical well-being, promoting a culture of inclusion, and encouraging work-life balance. This focus on employee satisfaction ensures that the company’s practices align with ethical standards. Furthermore, IBM’s approach is centered on long-term benefits rather than immediate productivity. By investing in a satisfied and well-supported workforce, IBM reduces turnover and retains valuable skills within the organization. IBM’s approach illustrates that it is possible to achieve high performance while maintaining ethical treatment of employees. By investing in employees' growth and well-being, IBM not only enhances productivity but also upholds a commitment to ethical practices, demonstrating that performance goals can be balanced with a genuine concern for employees' holistic needs.

Ethical Leadership and Corporate Social Responsibility

 

In the Philippines, ethical leadership and Corporate Social Responsibility (CSR) are crucial for ensuring that employees are treated with dignity and fairness. Ethical leaders in Filipino businesses prioritize transparency, fairness, and the overall well-being of their employees, setting an example that echoes throughout the organization. For instance, Filipino companies like Ayala Corporation have demonstrated a commitment to ethical practices and social responsibility, integrating these values into their business strategies to support fair labor practices and community development.

 

CSR initiatives in the Philippines focus on enhancing working conditions, ensuring fair compensation, and offering opportunities for employee growth. An example is the approach taken by companies like Jollibee Foods Corporation, which is known for its CSR efforts that include providing safe working conditions, fair wages, and career development programs. Jollibee’s initiatives reflect a commitment to treating employees as valuable contributors to the company’s success rather than mere resources.

 

The alignment with stakeholder theory is misleading in these practices. Stakeholder theory, introduced by R. Edward Freeman in 1984, suggests that organizations should account for the interests of all stakeholders, including employees, in their decision-making processes. This theory advocates for a broader view beyond solely maximizing shareholder value, emphasizing the importance of considering the well-being of all those affected by business operations.

 

For instance, the approach of companies like Globe Telecom includes providing comprehensive benefits, educational opportunities, and fair wages for employees. This demonstrates a dedication to valuing employees as crucial stakeholders, fostering a positive work environment, and contributing to long-term success.

 

Ethical leadership and CSR are vital in promoting respect and fairness towards employees in the Philippine business landscape. Leaders who champion transparency and fairness set a positive example, while CSR programs that focus on employee welfare reflect a commitment to recognizing employees as essential stakeholders. This approach aligns with stakeholder theory, underscoring the importance of considering the interests of all stakeholders in organizational decision-making.

 

 

 

Effect on the Human Person

 

When employees are regarded merely as resources, they face significant risks of exploitation, misuse, and manipulation. This often leads to overworking, underpayment, and undervaluation, as seen in companies where unrealistic productivity targets are imposed without adequate breaks or fair compensation. In Philippine companies like Jollibee Foods Corporation, where workers might be pressured to meet high demands without proper support, employees can experience severe stress and burnout, manifesting in physical symptoms like fatigue and headaches, and mental health issues such as anxiety and depression.

 

On the other hand, treating employees as valued individuals fosters a healthier work environment. For instance, a Philippine company like BDO Unibank prioritizes its employees’ well-being by offering flexible work arrangements, extensive benefits, and a supportive atmosphere. This approach makes employees feel appreciated and motivated. BDO Unibank’s focus on wellness programs and professional development emphasizes its commitment to valuing employees as key to its success. Such a positive environment enhances creativity, productivity, and loyalty, as employees are more engaged and contribute effectively when they feel respected.

 

Likewise, a company like San Miguel Corporation places significant emphasis on employee well-being through comprehensive support programs that address mental health, work-life balance, and career growth. This commitment to employee welfare not only boosts job satisfaction but also fosters a sense of community within the organization. Employees are encouraged to share ideas and take ownership of their roles, which leads to innovative solutions and a more engaged workforce.

 

Treating employees as mere resources can lead to exploitation and health issues while valuing them as individuals creates a positive work environment that enhances job satisfaction and overall well-being. When employees feel respected and valued, they are more motivated and contribute more effectively, resulting in better outcomes for both the employees and the organization.

 

Conclusion

The ethical implications of viewing employees as resources or assets are reflective and complex. While recognizing employees as valuable assets emphasizes the importance of investing in their development, it is equally critical to uphold their inherent dignity and worth.

 

Viewing employees solely as resources can lead to a focus on efficiency and productivity at the expense of individual well-being. This perspective might result in treating employees simply as tools to achieve business goals, overlooking their needs and rights. For example, in a factory setting, pushing workers to meet strict deadlines without proper rest or safety measures can cause high turnover, injuries, and decreased job satisfaction, reflecting a troubling disregard for employees' intrinsic value.

 

On the other hand, ethical theories and organizational behavior research support treating employees as "ends in themselves" rather than mere means to an end. This approach involves valuing people’s unique contributions and ensuring their well-being. Companies like Ben & Jerry’s and Microsoft exemplify this perspective. Ben & Jerry’s is noted for its fair wages, comprehensive benefits, and commitment to personal growth, fostering a positive work environment where employees feel valued. Similarly, Microsoft promotes a balanced work-life environment through flexible hours, mental health resources, and a supportive culture, demonstrating respect for employees' individual contributions and enhancing overall engagement.

 

Research highlights that organizations recognizing employees as valuable individuals enhance job satisfaction, the performance, and create a more ethical and positive work environment. Employees who feel respected and valued are more likely to be committed and innovative, benefiting both themselves and the organization.

 

In conclusion, while treating employees as resources can highlight the need for development investments, it is essential to balance this view with respect for their dignity and intrinsic worth. Ethical theories and organizational behavior research support the notion that recognizing employees as valuable individuals leads to a more positive, ethical work environment, ultimately benefiting both employees and the organization.

References

Becker, G. S. (1964). Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education.

Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117-134.

Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach.

Herzberg, F., Mausner, B., & Snyderman, B. B. (1959). The Motivation to Work.

Kant, I. (1785). Groundwork of the Metaphysics of Morals.

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Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50(4), 370-396.

 

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Moral compass of a certified public accountant (CPA): A literature review

 Jesus B. Reyes, CPA, MBA

DIVINE WORD COLLEGE OF LAOAG, Laoag City, August 2024

Abstract

This paper explores the moral compass guiding Certified Public Accountants (CPAs) in the Philippines. It examines the ethical frameworks, principles, and challenges faced by CPAs in their professional duties. The study includes a comprehensive literature review covering various aspects such as professional ethics, regulatory standards, and an actual ethical dilemma. Through this exploration, the paper aims to highlight the importance of a strong ethical foundation in ensuring the integrity and reliability of financial reporting and auditing. The author concludes that by fostering a strong ethical foundation, CPAs can contribute to the integrity and reliability of financial reporting and uphold the trust of clients, stakeholders, and the public.

Keywords: Certified Public Accountant (CPA), morality, ethics, Code of Conduct, ethical behavior, ethical dilemma

 Introduction

Certified Public Accountants (CPAs) play a critical role in the financial system, ensuring transparency, accuracy, and trust in financial reporting. Their responsibilities go beyond mere number crunching; they serve as guardians of financial integrity, providing assurance to stakeholders about the veracity of financial statements. In the Philippines, the significance of CPAs is amplified due to the complex economic landscape and stringent regulatory environment. As such, understanding the ethical frameworks that guide their professional conduct is paramount.

The moral compass of CPAs is guided by various ethical theories, professional codes of conduct, and regulatory frameworks. Ethical behavior in accounting is essential for maintaining public trust, particularly in the face of financial scandals that have eroded confidence in the profession globally. In the Philippines, the Professional Regulatory Board of Accountancy (BOA) has established a comprehensive Code of Ethics that sets the standards for professional conduct. Adherence to these ethical principles ensures that CPAs uphold the highest standards of integrity and transparency.

Cultural values also play a significant role in shaping the ethical perceptions and behaviors of CPAs in the Philippines. The collectivist nature of Filipino society emphasizes relationships, family, and community, which can sometimes create conflicts between personal loyalties and professional responsibilities. For instance, the concept of "hiya" (shame) can deter whistleblowing, while "pakikisama" (smooth interpersonal relationships) may pressure CPAs to prioritize personal bonds over ethical principles. Understanding these cultural nuances is essential for addressing ethical challenges effectively.

Moreover, the ethical development of CPAs begins with their education. Integrating ethics into the accounting curriculum is crucial for equipping future professionals with the knowledge and skills to navigate complex ethical dilemmas. Ethics education helps students develop a strong moral foundation, fostering virtues such as honesty, diligence, and fairness. By engaging with real-life case studies and ethical scenarios, students learn to apply ethical principles to their professional practice, preparing them for the ethical challenges they will face in their careers.

This paper aims to explore the various dimensions of the moral compass of CPAs in the Philippines. Through an extensive literature review, it will investigate the ethical theories, professional codes of conduct, and cultural influences that shape the ethical behavior of CPAs. Additionally, it will examine the role of corporate governance, ethics education, and regulatory frameworks in promoting ethical accountability. By providing a comprehensive understanding of these factors, this study seeks to highlight the importance of maintaining high ethical standards in the accounting profession and the critical role CPAs play in ensuring the integrity of financial reporting.

Literature review

Ethical Theories and Accounting

Ethical theories provide the foundational principles that guide CPAs in their professional conduct. Utilitarianism, deontology, and virtue ethics are some of the key theories that influence decision-making in accounting. Utilitarianism emphasizes the greatest good for the greatest number, which can sometimes conflict with strict adherence to rules. For instance, a utilitarian approach may lead a CPA to support decisions that benefit the majority of stakeholders, even if such decisions slightly bend the rules (Sison & Fontrodona, 2022).

Deontology, on the other hand, focuses on duty and adherence to ethical rules, aligning closely with the Code of Ethics for CPAs in the Philippines. This theory advocates for actions that comply with moral norms and regulations, regardless of the outcome. For CPAs, this means prioritizing honesty and transparency in financial reporting over the potential benefits of misreporting for personal or organizational gain. Deontological ethics underscores the importance of following the established professional standards and regulatory requirements to maintain the integrity of the profession (Professional Regulatory Board of Accountancy, 2016). 

Virtue ethics emphasizes the character and moral virtues of the accountant, promoting integrity, honesty, and fairness in all professional activities. This approach suggests that ethical behavior stems from the personal virtues of the individual rather than external rules or consequences. For CPAs, cultivating virtues such as honesty, diligence, and fairness is crucial in fostering trust and reliability in their work. Virtue ethics encourages accountants to develop a strong moral character, which naturally leads to ethical decision-making and professional conduct (Thorne, 2018). 

Professional codes of conduct

The Professional Regulatory Board of Accountancy (BOA) in the Philippines has established a Code of Ethics for CPAs, which serves as a guiding document for ethical behavior. This code outlines principles such as integrity, objectivity, professional competence, confidentiality, and professional behavior. Adherence to these principles ensures that CPAs maintain public trust and uphold the reputation of the profession. The Code of Ethics provides a framework for ethical decision-making, helping CPAs navigate complex professional situations.

Integrity. This is the cornerstone of ethical behavior for CPAs. It requires accountants to be honest and forthright in all professional and business relationships. Integrity means that CPAs must present financial information accurately and without bias, regardless of any personal or external pressures. This ethical principle is essential for maintaining public trust and ensuring that stakeholders can rely on the financial statements provided. The emphasis on integrity also means that CPAs must avoid any actions that might bring dishonor to the profession, even if those actions might seem beneficial in the short term.

Integrity involves more than just honesty; it also encompasses a commitment to moral principles such as fairness and impartiality. For example, a CPA who discovers financial discrepancies must address them transparently, rather than concealing errors to avoid potential backlash. This principle reinforces the importance of ethical behavior even when faced with difficult decisions. Upholding integrity ensures that the CPA’s work is reliable and credible, thereby supporting the overall stability and trustworthiness of the financial system.

Objectivity. This requires CPAs to be impartial and free from conflicts of interest in their professional duties. This principle ensures that their judgments are based on verifiable data and unbiased analysis rather than personal interests or external influences. Objectivity is particularly important given the close-knit nature of business relationships and the potential for familial and social ties to influence professional decisions. By maintaining objectivity, CPAs can provide accurate and fair financial reports that reflect the true state of an organization’s finances.

Objectivity is essential in audit and assurance services, where CPAs must evaluate financial statements and provide opinions based solely on evidence and professional standards. It also extends to other areas such as tax preparation and consulting, where CPAs must give advice that is in the best interest of their clients while adhering to legal and ethical guidelines. Objectivity helps prevent the manipulation of financial information and ensures that all stakeholders receive an accurate and unbiased view of an organization’s financial health.

Professional competence and due care.  This requires CPAs to maintain their knowledge and skills at a high level, ensuring that they can provide competent professional services. This involves continuous learning and professional development to keep up with changes in accounting standards, laws, and best practices. In the Philippines, the dynamic economic environment and evolving regulatory landscape necessitate that CPAs remain up-to-date with current developments to offer relevant and accurate advice to their clients and employers.

Professional competence also involves applying due care in all professional engagements, meaning that CPAs must act diligently and in accordance with applicable technical and professional standards. This ensures that the work performed meets the expected quality and reliability. For instance, a CPA preparing financial statements must adhere to the Philippine Financial Reporting Standards (PFRS) and Philippine Accounting Standards (PAS) and ensure that all disclosures are complete and accurate. By demonstrating professional competence, CPAs enhance the credibility of their services and contribute to the trustworthiness of financial reporting.

Confidentiality. CPAs are required to respect the privacy of information obtained during professional engagements and to refrain from disclosing it without proper authorization or legal obligation. This principle is crucial in maintaining the trust of clients and other stakeholders who rely on CPAs to handle sensitive financial information responsibly. In the Philippines, where business relationships often extend beyond formal contracts, maintaining confidentiality is key to preserving professional integrity and trust.

CPAs must be vigilant in protecting confidential information from unauthorized access or disclosure. This involves implementing appropriate safeguards and being cautious about discussing client information in public or informal settings. Confidentiality also extends to former clients, meaning that CPAs must continue to protect their information even after the professional relationship has ended. Adhering to this principle helps prevent conflicts of interest and ensures that clients can trust CPAs with their sensitive financial data.

Professional behavior. This entails complying with relevant laws and regulations and avoiding any actions that could discredit the profession. This principle encompasses a wide range of ethical conduct, including honesty, respect, and responsibility in all professional interactions. In the Philippines, CPAs are expected to act in a manner that reflects well on the profession, promoting public confidence in their services.

Professional behavior includes adhering to the Professional Code of Ethics for CPAs, which sets forth guidelines for ethical conduct. It also involves being accountable for one’s actions and decisions, demonstrating reliability, and maintaining a high standard of work. CPAs must avoid actions that could be perceived as unethical or that could harm the reputation of the profession. This includes avoiding conflicts of interest, not engaging in fraudulent activities, and being transparent in all professional dealings.

By upholding professional behavior, CPAs contribute to the overall integrity and trustworthiness of the accounting profession. They serve as role models for ethical conduct, fostering a culture of transparency and accountability that benefits clients, stakeholders, and the broader financial community (Professional Regulatory Board of Accountancy, 2016).

Ethical decision-making models

Ethical decision-making models provide a structured approach for CPAs to resolve ethical dilemmas. The American Accounting Association (AAA) model, for instance, outlines a seven-step process for ethical decision-making, including identifying the facts, recognizing ethical issues, and considering alternative actions. This model guides CPAs through a systematic analysis of ethical dilemmas, helping them arrive at well-reasoned and ethically sound decisions.

The seven-step process begins with identifying the relevant facts of the situation, followed by recognizing the ethical issues involved. CPAs then need to determine the affected parties and consider the possible consequences of different actions. The next steps involve identifying the relevant ethical principles and evaluating the available alternatives in light of these principles. Finally, CPAs make a decision and reflect on the outcome, learning from the experience to improve future ethical decision-making (Thorne, 2018).

Applying ethical decision-making models helps CPAs decode on complex professional scenarios, ensuring that their actions are aligned with ethical standards. These models provide a comprehensive framework for addressing ethical challenges, promoting consistency and transparency in decision-making. By systematically analyzing ethical dilemmas, CPAs can make informed decisions that uphold the integrity of the profession and protect the public interest (Mintz & Morris, 2021). 

Impact of Culture on Ethical Perceptions

Cultural values significantly influence the ethical perceptions and behaviors of CPAs. In the Philippines, a collectivist culture emphasizes the importance of relationships, family, and community. These cultural values can impact ethical decision-making, sometimes leading to conflicts between professional responsibilities and personal loyalties. Understanding the cultural context is crucial for developing ethical guidelines that are relevant and effective in the Philippine setting. 

The collectivist orientation in Filipino culture fosters strong interpersonal relationships and a sense of communal responsibility. This cultural trait can influence CPAs to prioritize familial and social obligations over strict adherence to professional ethics. For instance, a CPA might face pressure to manipulate financial statements to benefit a family member's business, creating a conflict between personal loyalty and professional integrity. Recognizing these cultural influences is essential for addressing ethical challenges and reinforcing the importance of ethical conduct.

Moreover, the concept of "hiya" (shame) in Filipino culture can deter individuals from reporting unethical behavior, as they may fear bringing disgrace to their family or community. This cultural sensitivity to shame underscores the need for ethical training programs that address cultural nuances and promote ethical accountability. By fostering a culture of transparency and ethical behavior, CPAs can navigate the complex interplay between cultural values and professional ethics (Hofstede, 2021).

Ethical challenges in financial reporting

Financial reporting is fraught with ethical challenges, including pressure to manipulate figures, misrepresent financial positions, and engage in fraudulent activities. CPAs in the Philippines must navigate these challenges while adhering to ethical standards. The integrity of financial reporting is critical for investor confidence and the overall stability of the financial system. Ethical lapses in financial reporting can have severe consequences, including legal penalties and reputational damage.

One of the primary ethical challenges in financial reporting is the pressure to meet earnings targets and financial projections. CPAs may face demands from management to alter financial statements to present a more favorable financial position, potentially leading to fraudulent reporting. Such actions compromise the integrity of financial information and erode public trust in the accounting profession. CPAs must resist these pressures and uphold ethical principles to ensure the accuracy and reliability of financial reports (Jones, 2021).

Another ethical challenge is the temptation to engage in creative accounting practices, which involve manipulating financial data within the bounds of accounting standards to achieve desired outcomes. While creative accounting may not always constitute outright fraud, it undermines the spirit of transparency and honesty in financial reporting. CPAs must maintain a commitment to ethical conduct and avoid engaging in practices that distort the true financial position of an organization (Mallin, 2016).

Corporate Governance and Accountability

Corporate governance structures play a vital role in promoting ethical behavior among CPAs. Effective governance mechanisms, such as independent audit committees and transparent reporting practices, enhance accountability and reduce the likelihood of unethical conduct. In the Philippines, corporate governance reforms have been implemented to strengthen the oversight of financial reporting and ensure the integrity of financial disclosures.

Independent audit committees are essential for maintaining the objectivity and independence of the audit process. These committees oversee the work of internal and external auditors, ensuring that financial statements are accurate and free from bias. By providing an additional layer of oversight, audit committees help prevent unethical behavior and promote transparency in financial reporting. CPAs play a crucial role in supporting the work of audit committees and ensuring that their findings are based on objective and reliable evidence. 

Transparent reporting practices are also critical for promoting ethical behavior and accountability. Companies are required to disclose accurate and complete financial information to stakeholders, including investors, regulators, and the public. Transparent reporting fosters trust and confidence in the financial system, encouraging ethical conduct among CPAs and other professionals. By adhering to principles of transparency and accountability, CPAs contribute to the overall stability and integrity of the financial market (Mallin, 2016). 

Role of education in ethical development

Ethics education is essential in shaping the moral compass of future CPAs. Incorporating ethics into the accounting curriculum helps students develop a strong ethical foundation and prepares them to handle ethical dilemmas in their professional careers. In the Philippines, accounting programs have integrated ethics courses to emphasize the importance of ethical behavior and professional responsibility.

Ethics education in accounting typically includes courses on ethical theories, professional codes of conduct, and ethical decision-making models. These courses provide students with the knowledge and skills needed to navigate complex ethical issues in the accounting profession. By engaging with real-life case studies and ethical scenarios, students learn to apply ethical principles to their professional practice, fostering a culture of integrity and accountability. 

Moreover, ethics education emphasizes the development of personal virtues such as honesty, fairness, and diligence. By cultivating these virtues, future CPAs are better equipped to make ethical decisions and uphold the highest standards of professional conduct. Ethics education also highlights the importance of continuous professional development, encouraging CPAs to stay informed about emerging ethical issues and evolving professional standards (Mintz & Morris, 2021). 

Whistleblowing and ethical reporting

Whistleblowing is a critical mechanism for uncovering unethical practices within organizations. CPAs have a responsibility to report unethical behavior, but fear of retaliation and cultural factors can hinder whistleblowing. Encouraging a culture of transparency and providing protection for whistleblowers are essential for promoting ethical accountability in the profession.

In the Philippines, cultural factors such as "hiya" (shame) and "pakikisama" (smooth interpersonal relationships) can discourage individuals from reporting unethical behavior. CPAs may fear damaging their relationships or facing social ostracism if they blow the whistle on unethical practices. Addressing these cultural barriers is crucial for fostering an environment where ethical reporting is encouraged and supported.

Legal protections for whistleblowers are also essential for promoting ethical accountability. In the Philippines, the Whistleblower Protection Act aims to protect individuals who report unethical or illegal activities from retaliation. CPAs must be aware of their rights and the protections available to them, ensuring that they can report unethical behavior without fear of reprisal. By promoting a culture of transparency and ethical reporting, the accounting profession can uphold its commitment to integrity and public trust (Miceli & Near, 2015).

Case Study of ethical dilemmas

The Pharmally scandal, which erupted in the Philippines, has brought significant attention to the ethical responsibilities and professional conduct of CPAs involved in auditing processes. This case highlights the critical role of auditors in detecting and preventing financial misconduct and the severe consequences that can arise from ethical lapses in the profession.

Pharmally Pharmaceutical Corporation, a relatively unknown company, was implicated in a scandal involving the procurement of medical supplies for the Philippine government during the COVID-19 pandemic. The controversy centered on allegations of overpricing, substandard products, and questionable procurement practices, leading to significant public outrage and a Senate investigation. During the investigation, it was revealed that Pharmally had received billions of pesos in government contracts despite having a small capital base and limited operational history. Questions were raised about the due diligence and auditing processes that allowed such transactions to proceed without scrutiny. 

The auditor in question, tasked with reviewing Pharmally's financial statements and ensuring their accuracy and compliance with relevant accounting standards, came under intense scrutiny. The investigation revealed several key issues related to the auditor's conduct. First, there was a significant lack of due diligence. The auditor failed to conduct a thorough review of Pharmally's financial records and procurement practices, allowing significant irregularities to go undetected. This failure undermined the integrity of the financial reporting process and highlighted a critical breach of professional standards.

Additionally, concerns about conflicts of interest emerged. The auditor's relationship with Pharmally raised questions about their independence and objectivity. Such conflicts can severely compromise the auditor's ability to provide an unbiased opinion, ultimately harming public trust in the auditing profession. Furthermore, the auditor's lack of adherence to ethical standards was evident in the inadequate documentation and verification of financial transactions. Proper auditing procedures require meticulous attention to detail and rigorous verification of all financial data, which were evidently lacking in this case.

The Pharmally scandal underscores the importance of maintaining high ethical standards in the accounting profession. For CPAs, integrity, objectivity, and professional competence are non-negotiable principles that must guide all professional activities. This case illustrates the potential consequences when these principles are compromised, including legal repercussions, loss of public trust, and damage to the profession's reputation. The regulatory framework in the Philippines, including oversight by bodies such as the Professional Regulatory Board of Accountancy and the Securities and Exchange Commission, plays a crucial role in enforcing these standards and ensuring that CPAs adhere to ethical guidelines. Strengthening these regulatory mechanisms and enhancing transparency can help prevent similar scandals in the future.

Moreover, the Pharmally case highlights the need for continuous ethics education and professional development for CPAs. By regularly updating their knowledge and skills, auditors can stay informed about emerging ethical challenges and evolving standards, better preparing them to navigate complex situations. Emphasizing the importance of ethical behavior in accounting curricula and professional training programs can instill a strong moral foundation in future CPAs, ensuring they uphold the highest standards of conduct throughout their careers (Magsambol, 2021).

Conclusion 

The moral compass of a Certified Public Accountant (CPA) is fundamental to maintaining the integrity and trustworthiness of the accounting profession. In the Philippines, CPAs face unique ethical challenges shaped by cultural values, regulatory frameworks, and the complex economic environment. Adherence to ethical principles such as integrity, objectivity, and professional competence is crucial in ensuring accurate and transparent financial reporting. The regulatory framework, including the Code of Ethics established by the Professional Regulatory Board of Accountancy and the oversight provided by the Securities and Exchange Commission, plays a significant role in enforcing ethical standards and protecting public interest.

Cultural factors such as collectivism and concepts like "hiya" (shame) and "pakikisama" (smooth interpersonal relationships) influence the ethical decision-making of CPAs in the Philippines. While these cultural values promote strong community bonds, they can also create conflicts between personal loyalties and professional responsibilities. Understanding and addressing these cultural influences through targeted ethics education and training is essential for fostering a culture of ethical accountability. By incorporating ethics into the accounting curriculum and emphasizing the development of personal virtues, future CPAs can be better prepared to navigate ethical dilemmas in their professional careers.

The ethical behavior of CPAs has far-reaching implications for the stability and transparency of the financial system. Ethical lapses in financial reporting can lead to significant legal and reputational consequences, undermining public trust in the profession. By upholding the highest standards of ethical conduct and continuously striving for professional excellence, CPAs can contribute to the overall health of the financial ecosystem. Promoting a culture of transparency, accountability, and ethical behavior is vital for ensuring the credibility and reliability of financial information in the Philippines.

Ultimately, continuous education and ethical vigilance are essential for CPAs to navigate the complexities of their profession and maintain public trust. Future research should focus on the evolving ethical challenges in the accounting industry and the development of robust ethical training programs.

By fostering a strong ethical foundation, CPAs can contribute to the integrity and reliability of financial reporting and uphold the trust of clients, stakeholders, and the public

References

 

Hofstede, G. (2021). Culture's consequences: Comparing values, behaviors, institutions and organizations across nations. Sage Publications.

 

Jones, M. (2021). Creative accounting, fraud and international accounting scandals. John Wiley & Sons.

 

Mallin, C. (2016). Corporate Governance. Oxford University Press.

 

Miceli, M. P., & Near, J. P. (2015). Blowing the Whistle: The organizational and legal implications for companies and employees. Lexington Books.

 

Magsambol, B. (2021). "Pharmally scandal: Key issues and findings." Rappler. Retrieved from https://www.rappler.com

 

Mintz, S. M., & Morris, R. E. (2021). Ethical obligations and decision-making in accounting: Text and cases. McGraw-Hill Education.

 

Professional Regulatory Board of Accountancy. (2016). Code of ethics for CPAs. Professional Regulation Commission.

 

Securities and Exchange Commission. (2020). Rules and regulations on professional conduct of CPAs. Securities and Exchange Commission.

 

Sison, A. J. G., & Fontrodona, J. (2022). The common good of the firm in the Aristotelian-Thomistic tradition. Business Ethics Quarterly, 22(2), 211-246.

 

Thorne, L. (2018). The role of virtue in auditors’ ethical decision-making. Research on Accounting Ethics, 4, 291-308.